by Ken Golliher:
It’s doubtful that you will find the resources you imagine because the alternatives you are assuming are “Make all loans” or “Turn down all loans.” Not even college professors looking for a research project would say you must choose between two extremes.
Bankers search for the point on the spectrum where the risk is adequately compensated by the reward; i.e. they pay most, but they bounce some. The analysis is skewed because their fee for bouncing is usually the same as their fee for paying, so they only bounce if the credit risk seems too great.
by John Burnett:
The terms "pay all" and "return all" are generally understood to describe how the bank's system processes overdrafts, not the ultimate destiny of the overdrafting items. In a "return all" environment any item that would OD the account is rejected and listed as an exception item to be cleared by the end of the bank's decision deadline. The bank either decides to pay the item or leave it unposted to the account and return it by its midnight deadline.
In a "pay all" environment, all items are posted, creating the overdraft (and often the OD fees), some of which may be reversed and returned and their OD fees morphed into returned-unpaid fees.